Algeria Economic Outlook

September 3, 2019

Annual growth decelerated to 1.5% in the first quarter, down from the 2.3% expansion recorded in Q4 2018, as protests that erupted in February and weakness in the hydrocarbon sector, which contracted for the seventh quarter in a row in Q1, dragged on the economy. Available information for Q2 is not any rosier: The trade deficit rose 12% in the first half of the year compared to the previous period, while international reserves continue to steadily decline as authorities attempt to shore up the dinar. As a consequence of the current political impasse, the interim government decided to halt planned economic reforms on fears that reducing government subsidies, a new hydrocarbons law and fiscal consolidation could all reignite protests.

Algeria Economic Growth

Economic growth will remain subdued this year due to heightened political unrest and low prices for oil and gas. Moreover, production for the two commodities, which account for 90% of the country’s exports and 60% of the budget, remains stagnant. Key downside risks are escalating political tensions and weak global growth, which could trim demand for oil and gas. FocusEconomics panelists expect growth of 1.6% in 2019, which is unchanged from last month’s forecast, and 1.7% in 2020.

Sign up for our newsletter

Cookies Policy: We use third-party cookies to improve our services by analyzing your browsing habits.
By continuing to use this website you are giving consent to cookies being used. For more information on cookies and how you can disable them, see our "Cookies Policy".
Close